Guilty Clifford directors face jail over false accounts, fees

Page Tools

Two former directors of property group Clifford Corp have pleaded guilty to a total of three charges and each could face jail terms of up to five years.

Ian Robert Hall yesterday appeared in the NSW Supreme Court and pleaded guilty to one charge of breaching the Corporations Act by falsifying the books of Clifford Corp in 1996-97 and one charge of insider trading relating to the sale of 850,000 Clifford Corp shares in October and November 1998.

John Barrie Loiterton appeared in the same court on June 29 and pleaded guilty to one charge of making a false or misleading announcement to the Australian Stock Exchange on October 21, 1998, in relation to the company's results.

The insider trading charge carries a maximum sentence of five years' imprisonment, as does releasing false information to the market. Falsifying company books carries a maximum jail term of two years.

The two men pleaded guilty instead of going to trial, which was due to begin this week.

AdvertisementAdvertisement

The charges followed a lengthy investigation by the Australian Securities and Investments Commission and a civil action relating to the overstating of the company's 1996-97 accounts through the use of misleading accounting techniques, including charging seven figure fees to related parties and associated companies to boost the bottom line.

During the civil action mounted last year by ASIC against Hall and Loiterton and two other men, the court was told that Clifford charged fees to Signature Group Australia, Ansair and JRA (which later became Austral Pacific Group).

All were companies controlled by Clifford and under the consolidation accounting rules applicable at the time, those fees should not have been included as revenue.

The fees included $1.5 million, $800,000 and $250,000 paid by the three companies to Clifford for services which ASIC said were shams or related party transactions which were not disclosed in the Clifford accounts in the 1996-97 year.

Hall and Loiterton are due to be sentenced on a date to be fixed and have been granted bail.